Chennai: The Central government should not shirk its responsibility of providing additional capital to IDBI Bank while burdening LIC with the task of bailing out the loss-making bank, said a top leader of a banking employees' union on Friday.
Referring to the news of the Life Insurance Corporation of India (LIC) being allowed to increase its stake in IDBI Bank, All India Bank Employees Association (AIBEA) General Secretary C.H. Venkatachalam, in a letter to the Union Finance Minister Piyush Goyal, said that due to the huge pile of bad loans in IDBI Bank, the need has arisen to provide it additional capital.
While investment is a part of LIC's business, it cannot be that all loss-making institutions are to be bailed out by LIC at the cost of the interest of the common people who are investors in the life insurance company, he added.
According to Venkatachalam, like the banks, even LIC has a huge portfolio of non-performing assets/investments.
If LIC invests in IDBI Bank, then the government's stake in the bank will come down below 51 per cent which is contrary to the assurance given to the Parliament when IDBI was converted into a bank, he added.